The MetaGovernance Working Group holds weekly calls. The calls are open to community members and the general public.
The MetaGovernance Working Group calls are led by the lead steward of the working group. The lead steward for Q1/Q2 2023 is @katherinewu.
Details for the call are the same from week to week. If there is a change to a scheduled call, a comment will be posted in this thread to give notice.
If you have items that you would like to add to the weekly agenda please message any of the MetaGovernance stewards (@katherinewu, @simona_pop, or @nick.eth) through the messaging feature on this forum.
Q: (Katherine) My first concern here is over the speed of deployment and performance fee. Namely, Karpatkey is proposing to move 100% of the endowment over a three-month period and deploy that all at once.That’s aggressive and not enough time to measure performance. Can we extend the deployment time to, say, 12 months?
A: (elbagococina) The original proposal was for six installments, but after consideration we changed it to three installments.
A: (Nick) My concern was the overhead required for so many DAO votes.
A: (Santi) We want to deploy funds to start earning yield as soon as possible. We are not against a different approach and we can align the proposal to the community’s opinion. In our opinion it is better to start getting yield right away. The funds will always remain under custody of the DAO, and will be deployed in risk-averse strategies. If the community feels differently, we can do every two months instead. This is open to discussion.
Q: (Katherine) I have some additional concerns over the strategy that is being proposed- for example, I’m worried about the lack of hedge for the Stakewise strategy. There was an infamous stEth deg last year, which to me shows that stETH isnt as stable as it seems. What happens if stETH de-pegs again? Any hedge for situations like that?
A: (elbagococina) We can act fast with our tools. We have daily alerts and a tech team that monitors prices in real time. We have a lot of tools we can use to react, including bots and alerts.
Q: (Marcus) Is there a contingency plan?
A: Yes, and we can share it after execution. You can check the actions we have taken in the past.
(Katherine) It would be helpful to have a section to communicate the contingency plan now, rather than later.
Q: (Katherine) Regarding the performance fee- the proposal is for 10% of the yield obtained in the previous week, per week. I would to see better ways to structure your performance fee- for comparion, low risk index funds in the tradfi world charges 0%, or other hedge funds have a benchmark. How do you feel about adjusting the language to indicate it is more performance-based?
A: (Nick) This is intended to be a low-risk fund. We don’t want to use language that may encourage taking higher risks in order to collect a higher performance fee.
A: (Santi) We are market agnostic. We are only trying to get yield on top of the supplied assets. If the market goes down, the endowment will be at a loss, regardless of what we do. In the winning proposal, we suggested the fees as part of the proposal. In the end, Karpatkey won according to the proposed fee structure. 10% per week means 10% of the obtained yield, no matter how often it is collected.
A: (elbagococino) We adopted a different fee structure for each DAO. We designed a fee structure specifically for this type of work for ENS DAO.
Q: (Katherine) What is the cadence of financial reporting? I think monthly would make sense, along with taking performance fee on that monthly basis based on P&L for the month.
A: It was originally proposed as a weekly report. Maybe it makes more sense to do it monthly. This is open to discussion with the community.
Q: In the forum comments under the Karpatkey there was a lot of discussion around the USDC conversion-- naming, how Karpatney plans to ‘time’ the market. Have you though about more creative strategies such as putting ETH into Compound, why can’t we just take USDC from that?
A: (Sebastien) That was not a strategy of Karpatkey/Steakhouse. It was a strategy put forward by ENS.
A: (Santi) The DAO’s exposure to ETH is around 95%. That is too high. What happens if we sell ETH too early? I think the DAO can live with that problem. But what happens if we sell too slowly and the price goes down? Selling too late could be a mistake that might kill the DAO. We can’t predict the price, and we can’t afford to make a mistake. We need ENS DAO to survive for 20 or 50 years. We need to reduce ETH dependence to the greatest possible extent. It is important to make clear that the endowment goal is to take risk-averse strategies and to obtain enough yield to sustain the DAO in the long-term.
A: (elbagococina) The objective of the treasury is to support the DAO. If we hold ETH, it is too risky, so we are going to find the best way to convert the ETH.
A: (Santi) We are not inflexible and we can adapt to what the DAO decides.
Q: (Accessor) When do you think is the most appropriate time to sell ETH as outlined in the proposal?
A: (Santi) The moment we receive ETH, we can sell it. Our original idea was to sell it over the period of one week. We do not want to try to time the market for best price.
Q: (Coltron) If the proposal to sell ETH for USDC were to pass, would that effect the endowment?
A: (Nick) That would function separately from the endowment.
D) Reserved for Open Discussion
Q: (Daylon) Has there been any discussion around accepting stablecoins for registration?
A: (Nick) It is doable, but the high gas cost of accepting ERC-20 payments has turned us off from implementing it thus far.
ENS Delegation for OP + Multisig creation
OP Gnosis multisig is created with the following address Safe - Safe
The current signer is 1/2 of matoken.eth and secretary.coltron.eth to keep it lightweight, but other Meta gov stewards can be added if more signers are required.
This is a separate topic, funds, and part of treasury from the Sell 10K ETH proposal. As we all know this has been a big topic with lots of robust discussions.
Katherine: One of the things I want to continue to flag (as I gathered from the forum post discussion here: Endowment initiation - #27 by nick.eth) are the concerns over deployment pace and risk management.
We are hiring a dedicated team for the endowment. I shared some contacts in the telegram group.
We have a risk management team, tech team, and are hiring more full-time people.
We need to know to deployment timeline because we are creating a team.
Santinomics (Re: deployment pace):
Delaying the decision by the proposed amount of time, we don’t see how it will improve the results. There may be a misconception about the way it works. The endowment is solely owned by the DAO. We are never touching those funds. It is a very simple and risk-averse strategy. The funds are in the control of the DAO at all times and can be withdrawn at any time.
One thing I can see in favor of a longer strategy would be in consideration of the need to activate a contingency plan should something go wrong, for example, a de-peg. My read is that people might feel uncomfortable because we don’t have a contingency management section outlining that plan.
What is your opinion of doing the 6-month timeline?
We can discuss that and we can adapt, but we need to know what the plan is.
We are thinking long-term, so in the end it won’t change a lot. There is an opportunity cost for the DAO if we don’t get started.
[Long discussion over performance fee, namely, delegates having an issue with taking a weekly performance fee (as opposed to a month), or that Karpatney’s performance fee style is not proportionate with the passive management style]
Proposed to possibly hold performance fee for a 6-month trial period, after which time the full fee would be back paid.
I want to see the proposal be in the best condition to pass. We can only talk so much before we need to just make it happen, but a lot of what I would consider a well-formed and good proposal is still missing. Would like to see a revised version/ draft for an executable proposal.